Take your pick

Entrepreneur, Oct, 1998 by Cynthia E. Griffin

If you want in-depth information on investments, try subscribing to a financial newsletter. Easier said than done - there are thousands to choose from.

J. David Stewart, founder of the 3-year-old financial newsletter Stewart Report, offers these guidelines:

* Evaluate the content:

1. Does the newsletter provide thorough research on investing, or a potpourri of information on lots of topics? For busy entrepreneurs, focus is key.

2. Does it target ultra-knowledgeable investors or neophytes? If you don't fit in with its readers, you'll either be in over your head or bored.

3. The overall investment strategy should be clearly stated, and there should be a section that looks at how past recommendations have fared - both good and bad.

4. Check the credentials of the newsletter analyst or organization. This, as well as current information on their accomplishments, should appear in each issue.

* Evaluate external factors:

1. Look at the credibility and track record of the analyst or organization publishing the newsletters. Does the featured analyst have enough experience in the financial community?

2. Does the newsletter offer alternative delivery methods? "In some places, you don't want to rely on the [U.S. Postal Service] because by the time you get it, the news might be old," says Stewart. Those sent via e-mail, priority mail or fax offer more timely information.

3. Find out the size of the subscriber base; if it's too large, a buy recommendation could artificially inflate an investment.

4. Does the newsletter give updates on investment recommendations between issues? This is particularly important with less-frequent publications.

While these guidelines can help you choose a good newsletter, Stewart says one other element must be considered: you. "Investors must be educated about what to look for in themselves," says Stewart. "When you take the broker out of the picture, people sometimes make mistakes in the areas of asset allocation and suitability [of a stock for their portfolio]."

That's why while newsletters may offer you indepth information, they're no substitute for a financial planner.

Sock It Away

It's easier than you think to retire rich.

You can be a millionaire by the time you retire! Sound like a get-rich-quick scheme? It's not, says Kay R. Shirley, owner of Atlanta-based investment advisory firm Financial Development Corp. and the author of Live Long & Profit (Dearborn Financial Publishing Inc.).

Shirley demonstrates how you can begin investing in your early 20s and end up with a million dollars by retirement age. The formula is relatively simple: "You need to invest 4 percent of your income in your 20s; 10 percent in your 30s; 12 percent in your 40s and 15 percent between ages 50 and 65 in mutual funds that return 12 percent or more even in bad times," explains Shirley. She also offers strategies for those who want to earn less than $1 million.

In the step-by-step guide, Shirley offers her take on how to pick the right mutual funds and what attributes each should have. In general, she believes funds must have been available for at least 25 years and return 12 percent or more annually after fees. The fund should also be managed by a team or a system as opposed to an individual.

Shirley helps busy entrepreneurs by dividing the book into chapters based on the age of the investor. And she targets all types of savers, from the compulsive to procrastinators.